HSIL Limited (HSIL) is an Indian company, which offers sanitaryware products, faucets
and glass bottles. The companys segments include building products division,
packaging products division and others division (retail, consumer, pipes, caps and
closures, e tc.) The company’s ~46% re venue comes from building products division,
~43% from Packaging products division and balance from others division.
Outlook and Valuation: Considering the various initiatives taken by the government like smart cities, housing for all by 2022, Swachh Bharat Abhiyan and push towards
providing sanitation, would create new demand avenues for the sanitaryware segment.
Further, the company has entered into new segments like consumer, pipes and caps
and closures which will drive the further growth. We expect HSIL to report net revenue
CAGR of ~12% to ~`2,905cr over FY2017-20E. On bottom-line front, we expect
CAGR of ~15% to `154cr over FY2017-20E owing to improvement in operating
margins. We initiate coverage on HSIL with a Buy recommendation and target price of
`510, indicating an upside of ~18% from the current levels.
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